The path to high political office is often lined with gold.
Win or lose, presidential nominees achieve major name recognition, something that can pay big dividends in the form of book advances, TV contracts and speaking fees.
But we may be witnessing something rare in the annals of U.S. politics: a presidential nominee who, rather than turbocharging his future earning potential, is crushing it.
Trump says revenues are surging
To hear GOP nominee Donald Trump tell it, his run for the White House is making his fortune even more enormous. According to his latest financial disclosure, filed in May, revenues are booming. From The Washington Post:
Last year’s form reported that Trump’s holdings brought in revenue of $362 million in 2014 and the first half of 2015, the campaign said in a statement. The form released Wednesday — which the campaign said shows revenue spiking to $557 million — covers a shorter period of time but encompasses the life of his presidential campaign, from July 2015 until [May 16, 2016].
In other words, Trump’s campaign said the candidate’s revenue had increased by nearly $200 million over the previous period. (Keep in mind this is revenue, or the gross receipts of the myriad Trump businesses. It’s not the profits, or his net income, from those businesses.)
Trump’s companies aren’t public and he’s refused to release his tax returns, so he and his accountants are the only ones who truly know how things are going. But evidence is starting to mount that his road may get a bit more rocky going forward.
What’s the Trump name worth?
If you try to sell your last name on Craigslist, you probably won’t find many takers. But if your name appeared on everything from bottled water to real estate, and screamed “quality” to potential purchasers, the story would be different.
Trump has claimed a net worth north of $10 billion, and his most valuable single asset isn’t a building or a golf course. It’s his name, otherwise known as his brand. From a June, 2015 Forbes article:
Below we break down what Trump says he is worth v. what we at Forbes estimate he is truly worth. The major difference: his brand. Trump claims that his brand and brand-related deals are worth some $3.3 billion. We value his brand at just $125 million.
While the value of an individual brand is subjective, what gives a brand value isn’t. From The Economist:
David Aaker, a business-school professor who helped spread the idea, identified three main components of brand equity: consumers’ awareness of a brand, the qualities they associate with it (BMW summons up German engineering, Ryanair says “cheap”) and loyalty.
There’s no doubt that Trump’s run for the White House has increased consumer awareness of his name. But when it comes to its perceived quality and brand loyalty, cracks are starting to show.
Survey: Would you buy a condo in a Trump-branded building?
While Trump has his fingers in many pies, from steaks to casinos to clothes, his fortune began and is still largely supported by real estate development and management. In the early days, Trump developed commercial real estate. In more recent years, rather than doing the building himself, he’s instead licensed his name to other developers, as well as putting it on golf courses he’s purchased. The reputation these projects earn are at least somewhat tied to his name.
We recently commissioned a simple survey, with only one question: “Given the things Donald Trump has said on the campaign trail, would you more or less likely to buy a condo in a Trump-branded building?” Here are the results, along with the margin of error.
Results like these are nothing short of disastrous. Imagine if companies like Coca-Cola, Apple, McDonald’s or Mercedes-Benz ran ads that resulted in them losing more than half their potential customers.
And for Trump, it gets worse.
There’s plenty of room at the inn
Another lucrative part of the Trump real estate empire is hotels. And here again, the candidate seems to be putting his mouth where his money is.
Travel booking site Hipmunk recently examined bookings at various Trump-branded hotel properties on their site. The results?
It appears that the rise of Trump’s presidential candidacy hasn’t translated into a rise [in] Trump Hotel bookings, whose share fell 59.3 percent this year on Hipmunk.
Note that Hipmunk isn’t saying that bookings on their site in Trump hotels dropped by 59 percent. They’re saying that last year, Trump hotels got 1.7 percent of all the bookings in their respective markets on their site, but this year they’ve gotten only 0.7 percent.
In some cities, it’s worse. Hipmunk says the share of the market on that site earned by Trump properties in New York and Las Vegas declined by 70 percent.
Of course, this is one travel site, and it also admits “Hipmunk users tend to be urban millennials, and so our own demographics come into play here as well.”
Is golf in the rough?
In addition to prestigious buildings, prestigious golf courses are an integral part of the Trump empire.
According to the Associated Press, when Trump filed his most recent financial disclosure form in May, he claimed $306 million in revenue from his courses around the world. About half of that revenue, $132 million, came from the Doral Country Club in Miami. That’s up from $49 million compared with his previous report.
In June, Trump got some bad news regarding Doral. After 55 consecutive years, the PGA was moving the World Golf Championship from Doral to, ironically enough, Mexico City. Why? According to the Miami Herald:
The PGA said in December that it would “explore all options regarding the event’s future” in the wake of Trump’s controversial proposal last year to ban Muslim immigrants from entering the United States.
In the end, the problem came down to money. The tournament sponsor since 2011, Cadillac, simply wouldn’t put up the requested $16 million fee. The company has said it’s not Trump-related.
Of course, one tournament does not a successful golf course make. But losing a tournament that’s been in the same place since 1962 certainly isn’t a great sign.
When one door closes …
Time, and perhaps the release of Trump’s tax returns, will tell whether Trump is actually getting richer or poorer as a result of his run. But if you’re feeling sorry for Trump, don’t.
As I said at the start of this article, name recognition often translates to money in America. Sarah Palin, another outspoken prior candidate and supporter of Trump, has nearly fallen out of the political spotlight. But just weeks ago the former GOP vice presidential candidate signed a contract to do a “Judge Judy”-type reality show. Pretty good for someone who, unlike the real Judge Judy, isn’t even a lawyer, much less a judge.
Should he not move into the White House, something similar may be awaiting The Donald. In June, Vanity Fair wrote that Trump may start his own news network:
Trump, this person close to the matter suggests, has become irked by his ability to create revenue for other media organizations without being able to take a cut himself. Such a situation “brings him to the conclusion that he has the business acumen and the ratings for his own network.” Trump has “gotten the bug,” according to this person. “So now he wants to figure out if he can monetize it.”
This rumor has been flatly denied by a Trump spokesperson.
So, what do you think? Is Trump fouling his nest?
Share your thoughts in comments below or on our Facebook page.
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